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Eastman Kodak Co. and MGM Mirage are among 283 U.S. companies likeliest to default, about a quarter of speculative-grade issuers, as a deepening recession raises the risk that borrowers may miss interest payments.
The number of high-yield, high-risk issuers on the “Bottom Rung” list compiled by Moody’s Investors Service almost doubled from 157 a year earlier, the New York-based ratings company said in a report published today.
“The current Bottom Rung list provides ample evidence of a severe default cycle,”
MGM Mirage, which owns 10 Las Vegas casinos and was added to the “Bottom Rung” this quarter, has $8.1 billion of bonds outstanding, with $1.28 billion coming due this year, according to data compiled by Bloomberg. Gambling revenue in Las Vegas, the biggest betting center in the U.S., fell the most on record last year, causing declining sales at MGM Mirage.
Rochester, New York-based Kodak, another new entrant, has $1.4 billion of bonds outstanding, including a $500 million facility maturing in October 2013, Bloomberg data show. Kodak, founded in 1880 by camera pioneer George Eastman, saw its profitable film business “evaporate” as digital cameras gained dominance, Chief Executive Officer Antonio Perez said in an interview on Feb. 5.
A total of 283 publicly traded US companies including many high-profile firms are at high risk of defaulting on their debt payments, Moody's Investors Service said Tuesday.
Moody's newly created "Bottom Rung" includes companies known to be in distress including automakers General Motors and Chrysler, but also corporate icons such as Eastman Kodak and American Airlines parent AMR Corp.
The financial rating firm said the list represents "the lowest-rated US non-financial speculative-grade companies
Among the well-known corporate names on the list are technology firms Palm and Advanced Micro Devices; retailers Barney's New York, Eddie Bauer and Loehmann's; food companies such as Chiquita Brands and Dole Foods; and travel firms including Orbitz, JetBlue and United Airlines parent UAL Corp.
Issuer Name Probability of Default Rating Corporate Family Rating Outlook Total Rated Debt Outstanding (in billions) Industry Sector
Allison Transmission, Inc. B3 B3 Negative $4.60 Automotive: Parts
AMR Corp. Caa1 Caa1 Negative $1.62 Transportation Services: Airline
Building Materials Corporation of America Caa1 B3 Negative $1.55 Manufacturing: Finished Products
Chrysler LLC Ca Ca Negative $9.00 Automotive: Passenger
Citadel Broadcasting Corp. Caa3 Caa2 Negative $2.29 Media: Broadcast Tv & Radio Stations
Claire's Stores, Inc. Caa3 Caa3 Negative $2.59 Retail: Department Stores
Dana Holding Corp. Caa1 Caa1 Rating under reveiw $2.08 Automotive: Parts
Dole Food Company, Inc. Caa1 B3 Negative $1.51 Natural Products Processor: Agriculture
Eastman Kodak Co. B3 B3 Negative $2.10 Technology: Hardware
Ford Motor Co. Caa3 Caa3 Negative $31.55 Automotive: Passenger
Freescale Semiconductor, Inc. Ca Caa1 Negative $10.20 Technology: Semiconductor
General Motors Corp. Ca Ca Negative $38.56 Automotive: Passenger
Georgia Gulf Corp. Caa2 Caa2 Negative $1.98 Chemicals: Commodity Chemical
Hawker Beechcraft Acquisition Co. B3 B3 Negative $2.85 Aircraft & Aerospace: Equipment
Idearc, Inc. Caa3 Caa2 Negative $9.29 Media Publishing: Books
Lear Corp. Caa2 Caa2 Rating under reveiw $2.30 Automotive: Parts
Level 3 Communications, Inc. Caa1 Caa1 Rating under reveiw $1.87 Telecommunications: Wireline
Michaels Stores, Inc. B3 B3 Negative $3.93 Retail: Specialty
OSI Restaurant Partners, Inc. Ca Caa1 Rating under reveiw $2.11 Restaurants: Family Dining
R.H. Donnelley Corp. Caa2 Caa1 Negative $3.48 Media: Printing - Holdco
Reader's Digest Association, Inc. Caa3 Caa3 Negative $2.21 Media Publishing: Newspapers & Magazines
Realogy Corp. Caa3 Caa3 Negative $7.56 Services: Consumer
Rite Aid Corp. Caa2 Caa2 Negative $6.80 Retail: Drug Stores
Source Interlink Companies Inc. Caa1 Caa1 Negative $1.63 Media Publishing: Newspapers & Magazines
Swift Transportation Co., Inc. Caa1 Caa1 Negative $2.98 Transportation Services: Trucking
Tenneco Inc. B3 B3 Negative $1.83 Automotive: Parts
Univision Communications, Inc. B3 B3 Negative $10.09 Media: Diversified Media - Fc
US Airways Group, Inc. Caa1 Caa1 Negative $1.60 Transportation Services: Airline
Visteon Corp. Caa1 Caa2 Negative $3.20 Automotive: Parts
Western Refining, Inc. B3 B3 Negative $1.40 Energy: Oil - Refining & Marketing